Port of Seattle Q1 2019 Financial Performance Report · Strong financial results in Q1 • Q1 YTD Actual: o Operating Revenues $2.6M favorable to budget and $16.9M over 2018. o The

Port of SeattleQ1 2019 Financial Performance Report

Portwide Financial Highlights

2

Strong financial results in Q1

• Q1 YTD Actual:

o Operating Revenues $2.6M favorable to budget and $16.9M over 2018.o The Non-Aviation Revenues $2.4M favorable to budget and $280K lower than 2018.o Operating Expenses $8.1M below budget and $7.6M over 2018.o Net Operating Income before Depreciation $10.7M favorable to budget and $9.3M

over 2018.o Total capital spending was $118.1M for Q1 2019.

• Year-End Forecast: o Operating Revenues $11.8M higher than budget.o Operating Expenses $1.2M higher than budget.o NOI before depreciation $10.5M higher than budget.

Portwide Net Operating Income Performance

Steady revenue growth since 20153

• Operating Revenues are $2.6M higher than budget due to higher revenues in: o Public Parkingo Ground Transportationo Clubs and Loungeso Conference & Event Centerso NWSA Distributable Revenue

• Total Operating expenses are $8.1M below budget due to: o Staffing vacancieso Project delays

-

100

200

300

400

500

600

700

800

900

2015 2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Other Operating Revenues Aeronautical Revenues Total Operating Expenses NOI

Non-Airport Net Operating Income Performance

4

NOI forecast exceeding budget for 2019

• Non-Airport Operating Revenue exceeded budget by $2.4M due to: o Increased activity in

Conference and Event Centers

o Higher NWSA Distributable Revenue

• Expenses are $8.1M lower than budget due to:o Staffing vacancieso Project delays

-

20

40

60

80

100

120

140

160

2015 2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Total Operating Revenues Total Operating Expenses NOI

Aviation DivisionQ1 2019 Financial Performance Report

Aviation Business Events

Growth continues6

• PASSENGERS: o February snow events resulted in canceled flights, flat growth o Still growing 3.7% through March o Increased 2019 growth assumption to 4% (budget assumed 3%)

• NEW INTERNATIONAL SERVICES STARTED:o Cathay to Hong Kongo Japan Airlines to Tokyo-Naritao Delta to Osaka

• NEW FACILITIES: Opened Phase 1a of North Satellite• 12 new Airport Dining & Retail units have opened in 2019

Business Highlights: 2019 GoalsSAFETY:• Airfield composite safety score of 29 exceeds annual target of 18

o Currently exceeding major ground incident target• Individual not going home: Q1 = 13 vs. 2019 goal < 52 (on track)• Occupational injury rate decreased 21% from 6.95 in 2018 to 5.51 • Implemented 2 Lean teams: employee safety, ground incidentsSECURITY:• Terminal security enhancements Phase I reached substantial completion in

February.• Commission authorized Phase II in April

Airfield composite safety score exceeding goal7

Business Highlights: 2019 GoalsEMPLOYEE ENGAGEMENT:• Goal is to increase employee engagement in the Aviation Division as

evidenced by a 3% increase over the 2018 survey results by Q4 2019.• Set performance goals for all non-represented employees: 79% complete• Create department specific survey action plans by end of Q2: in progress

INNOVATIONS & EFFICIENCES:• 21% reduction in YOY stop and go conditions on airport roadways• 50% reduction in YOY Hold in Corridor events• Shark Tank innovations forum held March 15

On track8

Business Highlights: 2019 GoalsASSET MANAGEMENT:

• Commission authorized asset management services contract in February

SOCIAL RESPONSIBILITY:

• Set 2019 WMBE goal of 12% for division in January

• Disparity study behind schedule

CUSTOMER SERVICE:

• Through Q1 exceeding five-year average for 3 of 6 key measures (goal is 2)

• Started WE ARE customer service training

• 2019 Skytrax award for Best Airport Staff Service – North America

On track9

Business Highlights: 2019 GoalsENVIRONMENT AND SUSTAINABILITY:

• Commission authorized bus replacements to run on renewable natural gas

• Issued RFP for purchase of renewable natural gas

• Completed sound insulation for 2 single family homes

FINANCIAL PERFORMANCE:

• Forecasting to achieve both 2019 goals:

o Non-aeronautical NOI of $141.3M vs. budget of $136.6M

o Airline costs (CPE) of $13.22 vs. budget of $13.39

• 12 new ADR units have opened in 2019

On Track10

Business Highlights: 2019 GoalsCAPITAL PROJECT, PLANNING & SAMP:

• SAMP:o Scoping report releasedo Decision made to split environmental review into separate NEPA/SEPA

documentso Evaluating need for updated forecasts

• Progressing with SAMP advanced planning on enabling projects

• Completed conceptual plan for main terminal optimization plan (MTOP)

• Commission authorized Widen Arrivals Approach project

• Remote bag check/express bus study 90% complete

Progress on major project milestones11

Airport Activity

Total passenger growth anticipated to be 4% for year

12

Year-to-date Q1:Passengers +3.7%Landed weight +3.6%Cargo metric tons +3.5%

Passengers (Growth Comparison)

Passenger updated growth forecast is 4% vs. initial 3%

13

Airline Cost Management (CPE)

2019 Revenue Sharing down from 2018 based on change from 40% to 20% sharing14

2019 Budget:• Adjusted for SLOA IV 20%

revenue sharing

2019 CPE Forecast:• Higher than 2018 due to

higher revenue requirements in 2019. Currently below Budget of 13.39 due to increase in forecasted non-airline revenues

Non-Aeronautical Performance

ADR, parking and TNCs driving positive revenue variance in 2019 forecast15

YTD 2019 vs. 2018:• Revenues 1.3%

Favorable• Expenses 6.7%

Favorable• NOI 13.% FavorableRevenue growth:• Rental car CFC• Public parking• ADR• GT

Total Operating Expense Performance

Anticipate spending to exceed budget due to snow events16

Q1 YTD:• $3.8M favorable, 4.6%

2019 Forecast:• $3.3M unfavorable, (-0.9%)

2019 Forecast over-run driven primarily by:• Snow removal related costs

and Utilities

Capital Spending

2019 spending variances primarily due to delayed spending, not project savings17

2019 Forecast:• IAF = $340M• NSAT = $141M• Other = $151M

Major 2019 Variances:• IAF = $37M• RCF Pavement

Remediation= $4.1M• Automated Security

Lane = $1M• Other - $11.1M

155,970 164,931 153,887

294,497

579,135

767,732

703,740

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2014 2015 2016 2017 2018 2019

Forecast

2019 Budget

Ca

pit

al S

pen

ding

(00

0s)

FTE Staffing Status

Existing 2019 March YTD = 6.57%, April = 7.17%18

Total FTE Vacancy Rate = 9.58%

Existing FTE Vacancy Rate = 6.57%

Approved Budget = 1105.78 FTEs

New FTEs = 54.37 (included in the Total)

Major 2019 Unplanned Expenses

19

• Checkpoint 1 Expansion, $560k Variance• Snow Removal, $2.6M Variance

o Tracked Snow Charges based on Program Code 8110:▪ 2019 Snow Removal Budget = $906k▪ YTD Snow Removal Costs against Program Code 8110 = $2.1M + potential estimated

untracked snow removal $1.5M▪ 2019 Snow Removal Variance Forecast = $2.6M

Maritime DivisionQ1 2019 Financial Performance Report

Business Highlights

Managing growth and environmental stewardship21

• Cruise – Issued RFQ for fourth cruise berth. Executed three-year preferential berth agreement with Carnival Cruise Lines guaranteeing 500,000 customers for each of the next three seasons.

• Ship Canal Fishing & Operations – Developed initial draft for FT Utilization Report. Received authorization to move forward with design for Salmon Bay Marina dock D-E.

• Elliott Bay Fishing & Commercial Operations – Two fish roe sales at Terminal 91.

• Recreational Boating –Customer insurance non-compliance reduced from 30% to .6% through staff implementation of new processes.

• Seaport Environmental – The Solid Waste Management Plan implementation process kicked-off at Fishermen’s Terminal, the Maritime Industrial Center, and Salmon Bay Marina and the Port rolled out waste diversion strategies tailored to terminal tenants, marina liveaboards, and the public.

• Stormwater Utility – YTD: Crews have assessed 76% of the system, rehabilitated 17.3%, completed 7 repairs, and installed 4 tide gates so far in 2019.

Maritime Financial Highlights

22

Revenue as planned, spending lower than expected

Maritime – 2019 NOI is $2,726K favorable to budget and $26K lower than 2018

• 2019 YTD Revenue unfavorable to budget by $55K. Positive variance in Grain Terminal offset by wharfage at T91 fishing docks.

• 2019 YTD Revenue $228K or 2% lower than 2018. Increase seen from Salmon Bay Marina and Recreational Boating tariff increases, offset by reduction in Grain volumes and leases from WSDOT.

• Expenses favorable to budget by $2,781K driven approximately 1/3 by Maritime, 1/3 by Maintenance, and 1/3 by Central Services. Expense are down $202K Y/Y.

• 5% of Capital budget was spent in the 1st quarter, with annual forecast at 96% of budget

• Stormwater Utility is tracking to budget.

2017 YTD 2018 YTD Budget Variance Change from 2018

$ in 000's Actual Actual Actual Budget $ % $ %

Total Revenues 9,053 9,670 9,442 9,497 (55) -1% (228) -2%

Total Operating Expenses 8,847 10,499 10,298 13,079 2,781 21% (202) -2%

Net Operating Income 207 (829) (856) (3,582) 2,726 76% (26) -3%

Depreciation 4,251 4,399 4,509 4,387 (122) -3% 110 2%

Net Income (4,044) (5,229) (5,365) (7,969) 2,604 33% (136) -3%

Fav (UnFav) Incr (Decr)

2019 Year-to-Date

Maritime Division Financial Trends

Forecasting $2.9M expense savings vs. 2019 budget23

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2014 2015 2016 2017 2018 2019Forecast

2019Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue

2019 Forecast Drivers:

Revenue1. Grain Terminal uncertainty.2. Cruise occupancy and unplanned

visits.3. Utilization of Elliott Bay moorage

and dockage facilities.

Expense1. Non-capitalizable consulting and

outside services related to new cruise terminal/berth.

2. Port Valet service costs.3. Tenant improvement costs.4. Central Services allocation.5. Maintenance spend.

Cruise Financial Trends

24

Cruise continues to be profitable

-

5,000

10,000

15,000

20,000

25,000

2016 2017 2018 Actual 2019 Forecast 2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Will occupancy exceed 104%

with bigger ships.2. Unplanned port of call visits.

Expense1. Non-capitalizable consulting

and outside services related to new cruise terminal/berth.

2. Port Valet service costs.3. Maintenance spend.4. Change of allocation

methodology for shared properties.

• Individual business lines forecast to budget as of Q1 2019.

Recreational Boating Financial Trends

25

Tracking to budget

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2016 2017 2018 2019Forecast

2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Utilization of guest moorage.2. Occupancy rates.

Expense1. Maintenance costs.2. Open staffing positions.

• Individual business lines forecast to budget as of Q1 2019. • Includes Shilshole Bay Marina, Bell Harbor Marina, and Harbor Island Marina.

Ship Canal Fishing & Ops Trends

26

Integrating Salmon Bay Marina

• Individual business lines forecast to budget as of Q1 2019. • Includes Fishermen’s Terminal, Maritime Industrial Center, and Salmon Bay Marina.

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Backfill with recreational

vessels while Fishermen’s Terminal fishing vessels at sea.

2. Events such as the Seattle Boat Show.

Expense1. Maintenance, both planned

and unplanned.2. Remediation tied to

Fishermen’s Terminal redevelopment.

3. Unfilled positions.

Elliott Bay Fishing & Commercial Ops Trends

27

Seeking to replace lost WSDOT lease revenue at T46

• Individual business lines forecast to budget as of Q1 2019.• Includes Terminal 91 (waterside non-Cruise), Terminal 46 Docks, Kellogg Island, Terminal 25, Terminal 18 Dolphins, Pier 69

Vessels, Pier 28 Docks, Pier 34 Dolphins, Pier 2 Docks, and Terminal 108 Moorage.

-

2,000

4,000

6,000

8,000

10,000

12,000

2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Long term occupancy by large

fishing vessels at T91.2. Wharfage.3. Utilization of smaller

moorage/dockage on the south end and up the Duwamish.

Expense1. Maintenance, both planned and

unplanned.2. Security and allocations.

Maritime Portfolio Management Trends

28

Leasing closer to market and managing costs

• Individual business lines forecast to budget as of Q1 2019.• Includes uplands of Shilshole Bay Marina, Terminal 91 (Industrial), Fishermen’s Terminal, Maritime Industrial Center, Salmon Bay Marina, T-115, T-108, and T-106.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Ability to backfill leases at T106.2. Filling the C3 building at the

Maritime Industrial Center.

Expense1. Non-capitalizable tenant

improvements.2. Maintenance spend.3. Change of allocation

methodology for shared properties.

Grain Terminal Goal: Net Income Maximized

29

Navigating volatility of tariffs and soybean exports

-

1,000

2,000

3,000

4,000

5,000

6,000

2016 2017 2018 2019 Forecast 2019 Budget

In 000s

Depreciation

Allocation

Operating Expense

Revenue


Revenue1. Impact of tariffs.2. Weather.

Expense1. Maintenance and allocations.

• Individual business lines forecast to budget as of Q1 2019.

Economic Development DivisionQ1 2019 Financial Performance Report

Economic Development Division Business Highlights

31

Workforce Development

32

Continued efforts on Workforce Development Initiatives

• 14 aspiring ironworkers graduated from the union’s second pre-apprenticeship cohort. 13 are now enrolled apprentices. The group has earned $140, 937 ($24+/hour) so far.

• ANEW also hosted a graduation event for their second cohort of construction pre-apprentices. They had 14 people complete their construction program. Starting wages for graduates from this program range from $22-27/hour

• Co-sponsored and participated on planning team for Museum of Flight’s Two-Day Women Fly event.

• Port partnered with King County Communities of Opportunity (COO), King County Priority Hire, WorkSource, ANEW, the Seattle Housing Authority, and HomeSight to host the Diversity in Construction Trades Event at NewHolly Gathering Hall in Rainier Valley.

Small Business / Diversity in Contracting

33

Implementing the Port’s new Diversity in Contracting Program

• Published the first Diversity in Contracting Annual Report to the community and the Port of Seattle's Commission. This report highlighted 2018 WMBE utilization results, 2019 Department/Division WMBE goals, annual outreach plans and results from WMBE pilot projects.

• Held a PortGen Maritime event focusing on the upcoming Maritime Projects, the Maritime's 2019 WMBE aspirational goal, and the Port's new Diversity in Contracting Program.

• Presented the Port's aspirational goals and new affirmative efforts required by those Primes interested in doing business with the Port to the Construction Management Association of America (CMAA).

• Met with Washington Department of Transportation Disadvantaged Business Enterprise (DBE) to learn how they staff program and to advance WMBE and DBE partnerships.

Tourism

34

Supporting Tourism Marketing programs and promoting gateway facilities

• Thirty organizations received 2019 tourism grants from the Port of Seattle. New recipients include: Goldendale Chamber of Commerce promoting the Goldendale Observatory, the Suquamish Museum targeting travelers in Seattle hotels and Methow Trails will improve their website promoting outdoor winter activities.

• Twenty four recipients were awarded Airport Spotlight advertising grants. Current recipients include Lewis County, Suquamish Tribal Museum, Sequim Lavender Farmers, Long Beach Visitors Bureau and Methow Trails.

• Selected the London-based representation firm Core Communications to provide tourism marketing programs on behalf of the Port of Seattle’s international tourism efforts.

• Participated in Aer Lingus Tour America travel show, ITB Berlin, Visit Seattle’s Korea Sales Mission and Active America China travel trade show to educate travel trade, tour operators and travel media about cruising from Seattle to Alaska and promote SeaTac International Airport as the gateway for international arriving visitors.

EDD Partnership Program

Continued Economic Development Partnership Program35

• YTD - Port of Seattle awarded $701,945 to 19 King County Cities as part of the 2019 Economic Development Partnership Program.

• Working with ten additional cities on 2019 grant requests

• Hosted quarterly partnership roundtable meeting with City grant partners that featured panel presentation from Small Business Administration, Small Business Development Centers, and SCORE (volunteer business counselors)

Real Estate Development

Launching development projects36

• Issued RFP to redevelop Terminal 106.• Initiated Commission approval to surplus and sell small property on Harbor

Avenue.• Received Commission authorization to start design work on light industrial

buildings at Terminal 91 and Fishermen’s Terminal.• Finalized appraisal of WA Dept. of Transportation property adjacent to the Port’s

Des Moines Creek West property.• This property enhances development potential of our property. Staff is

starting negotiations with WSDOT now that we have agreed on site’s value.• Jeffrey Utterback took position with Los Angeles International airport. Staff is

working with Human Resources to fill Real Estate Development Director position over the next 8-12 weeks.

Portfolio Management

Maintaining strong occupancy37

• Secured a maritime-related tenant to lease the office building at Salmon Bay Marina, resulting in 100% occupancy on the uplands.

• Relocated two existing storage locker tenants and secured a new storage locker tenant at the Maritime Industrial Center with 25% rent increase

• Replaced two failed ground-level seismic joint covers at Bell Street Garage.

• Added new square footage to landside Terminal 91 via new lease and lease amendments in Q1 2019, totaling 40,950 sf.

Economic Development Financial Highlights

38

Revenue exceeding plan

2019 Q1 NOI $1,738K favorable to budget and $161K greater than 2018• Revenue favorable to budget by $275K and $178K greater than 2018 driven by favorable volumes at the

Conference and Event Centers. Annual revenue forecast 1% above budget and 4% below 2018 from anticipated closures related to Conference and Event Center modernization project.

• Expenses favorable to budget by $1,463K driven by spend pushed to Q2 on EDD Initiative programs, timing of tenant improvements, favorable P66 allocation methodology change, and underspend in central services. Expenses are flat on a Y/Y basis. Annual expenses forecasted to 1% under budget and 11% higher than 2018 due to primarily to higher spending in initiative programs.

• 15% of Capital budget was spent in the 1st

quarter, with annual forecast at 99% of budget.



Total Revenues 3,126 4,497 4,674 4,399 275 6% 178 4%

Total Operating Expenses 5,345 5,984 6,001 7,464 1,463 20% 17 0%

Net Operating Income (2,219) (1,487) (1,326) (3,065) 1,738 57% 161 11%

Depreciation 927 998 931 949 19 2% (67) -7%

Net Income (3,146) (2,485) (2,257) (4,014) 1,757 44% 228 9%


2019 Year-to-Date

Economic Development Division Financial Trends

Forecasting $650K favorable to budget39


Revenue1. Impact of Conference and

Event Center Modernization.2. Lessee turnover and ability to

expand unplanned space rental.

Expense1. Program spend / execution.2. Tenant Improvements.3. Maintenance spend.4. RE development costs.

* Includes Small Business, Tourism, Workforce Development, Real Estate Development, and Economic Development Grants.** Includes Portfolio Management, Division Management, Facilities, and Other.

(5,000)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2014 2015 2016 2017 2018 2019Forecast

2019Budget

In 000s

Depreciation

Allocation

*Program Expense

**Operating Expense

Revenue

Portfolio Management Trends

40

Increasing margins


Revenue1. Impact of Conference and Event Center

Modernization.2. Lessee turnover and ability to expand

unplanned space rental.

Expense1. Tenant improvements.2. Maintenance spend.3. Costs associated with transitioning the

NWSA leasing software.

• Individual business lines forecast to budget as of Q1 2019. • Includes non-alliance & upland real-estate at Tsubota, T-91 (General), T-86, P-69, Bell Street Garage, Smith Cove Conference

Center, Bell Harbor Conference Center, World Trade Center, Foreign Trade Zone, Pier 2, T-34, and T-102.

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2016 2017 2018 2019Forecast

2019 Budget

in 000s

Depreciation

Allocation

Operating Expense

Revenue

Central ServicesQ1 2019 Financial Performance Report

Central Services Business Highlights

42

Achieved a number of accomplishments in Q1.

• The Port supported the Environmental Challenge with Raisbeck Aviation High attended by 110 sophomore students.

• The Port of Seattle along with City of SeaTac sponsored the Noise 101 Symposium.

• Enhancements to the Contract Data System (CDS) will support small business tracking requests, improve and refine the Monthly Amounts Paid (MAP) process, and introduce a series of CPO-directed updates related to changes in their business processes and priorities.

• Prepared and completed the Port’s 2018 Comprehensive Annual Financial Report (CAFR), pending issuance of an independent auditor’s opinion on its financial statements in April/May 2019.

• Hosted the first Strategic Initiatives Learning Event featuring Ann Mei Chang, author of Lean Impact: How to Innovate for Radically Greater Social Good.

• Community Tree Planting event was held on Port Miller Creek Watershed property.

• Hosted the Skilled Trades Career Awareness event.

43

Expenses came in $5.4M favorable to the budget in Q1 2019

Central Services Financial Summary • Q1 YTD Actual

o Operating expenses are $5.4M favorable to budget mainly due to staff vacancies and project delays.

o Operating expenses are $601K lower than 2018 mainly due to lower Outside Services expenses and Equipment expenses.

• Year-End Forecast:o Operating expenses forecast are $1.7M

favorable to budget due to savings in Payroll and Outside Services.

o Operating expenses forecast are $21.8M higher than 2018 due to higher payroll and more project-related expenses. Departments that have the most increase include:o Core Central Support Services: $8.0Mo Police: $6.8Mo Environment & Sustainability: $4.0Mo Capital Development: $3.1M -

20

40

60

80

100

120

140

160

2015 2016 2017 2018 2019 Forecast 2019 Budget

In 000s Core Central Support Services Police Capital Development Environment & Sustainability

AppendixQ1 2019 Financial Performance Report

Portwide Financial Summary

45

Strong financial performance for the Port


2017 YTD 2018 YTD 2019 Year-to-Date Budget Variance Change from 2018


Aeronautical Revenues 59,873 70,134 83,674 84,197 (523) -0.6% 13,540 19.3%

Airport Non-Aero Revenues 54,006 52,372 55,996 55,253 743 1.3% 3,625 6.9%

Non-Airport Revenues 28,020 28,663 28,382 26,024 2,358 9.1% (280) -1.0%

Total Operating Revenues 141,899 151,169 168,052 165,475 2,577 1.6% 16,884 11.2%

Total Operating Expenses 82,008 89,623 97,209 105,333 8,124 7.7% 7,586 8.5%

NOI before Depreciation 59,891 61,546 70,843 60,142 10,701 17.8% 9,297 15.1%

Depreciation 40,817 40,892 41,054 40,826 (229) -0.6% 162 0.4%

NOI after Depreciation 19,074 20,653 29,789 19,316 10,473 54.2% 9,136 44.2%

Non-Airport Financial Summary

46

Non-Airport NOI outperformed budget by $6.7M in Q1

Fav (UnFav)



NWSA Distributable Revenue 14,852 13,419 12,986 10,978 2,009 18.3% (432) -3.2%

Maritime Revenues 9,053 9,670 9,442 9,497 (55) -0.6% (228) -2.4%

EDD Revenues 3,127 4,497 4,674 4,399 275 6.3% 178 4.0%

SWU & Other 988 1,077 1,280 1,151 128 11.2% 202 18.8%

Total Operating Revenues 28,020 28,663 28,382 26,024 2,358 9.1% (280) -1.0%

Total Operating Expenses 15,246 18,548 17,513 21,830 4,317 19.8% (1,036) -5.6%

NOI before Depreciation 12,774 10,114 10,869 4,194 6,675 159.1% 755 7.5%

Depreciation 10,163 9,984 9,852 9,428 (424) -4.5% (131) -1.3%

NOI after Depreciation 2,611 131 1,017 (5,234) 6,251 -119.4% 886 678.2%

Incr (Decr)

Portwide Operating Revenues Summary

47

Operating revenues exceeded budget by $2.6M



Aeronautical Revenues 59,873 70,134 83,674 84,197 (523) -0.6% 13,540 19.3%

Public Parking 17,456 18,668 19,956 19,583 373 1.9% 1,288 6.9%

Rental Cars - Operations 6,129 6,009 6,234 6,271 (37) -0.6% 226 3.8%

Rental Cars - Operating CFC 291 1,293 994 1,144 (149) -13.0% (298) -23.1%

ADR & Terminal Leased Space 13,346 13,887 14,336 14,409 (73) -0.5% 449 3.2%

Ground Transportation 3,613 3,707 4,523 4,344 179 4.1% 816 22.0%

Employee Parking 2,302 2,565 2,677 2,392 284 11.9% 111 4.3%

Airport Commercial Properties 7,810 2,894 3,212 3,081 131 4.3% 317 11.0%

Airport Utilities 1,750 1,759 1,719 1,980 (261) -13.2% (39) -2.2%

Clubs and Lounges 861 1,202 1,902 1,601 302 18.9% 700 58.2%

Cruise 71 32 43 78 (35) -44.6% 11 34.9%Recreational Boating 2,592 3,005 3,119 3,129 (10) -0.3% 114 3.8%

Fishing & Operations 2,166 2,224 2,291 2,484 (193) -7.8% 67 3.0%

Grain 1,606 1,556 1,434 1,283 151 11.8% (122) -7.8%

Maritime Portfolio Management 2,610 2,845 2,550 2,523 27 1.1% (295) -10.4%

Central Harbor Management 2,014 2,162 2,150 2,107 43 2.0% (12) -0.5%

Conference & Event Centers 1,107 2,330 2,519 2,287 232 10.2% 189 8.1%

NWSA Distributable Revenue 14,852 13,419 12,986 10,978 2,009 18.3% (432) -3.2%

Other 1,450 1,478 1,732 1,605 127 7.9% 254 17.2%

Total Operating Revenues (w/o Aero) 82,027 81,034 84,378 81,277 3,101 3.8% 3,344 4.1%

TOTAL 141,899 151,169 168,052 165,475 2,577 1.6% 16,884 11.2%


2019 Year-to-Date

Portwide Operating Expense Summary

48

Operating expenses were $8.1M below budget

• Payroll expenses were $2.0M below budget due to staffing vacancies.

• Outside Services were $7.3M favorable to budget due to timing of spending, project delays, and some actual savings.

• Supplies & Stock were $635K over budget mainly due to more De-icing Materials for snow removal.

• Other Expenses were $1.3M unfavorable mainly due to Non-Litigated Injuries & Damages Expense and higher Third Party Mgmt Operating Expense.



Salaries & Benefits 28,142 31,239 32,595 34,219 1,624 4.7% 1,356 4.3%

Wages & Benefits 25,539 29,627 31,459 31,807 348 1.1% 1,833 6.2%

Payroll to Capital Projects 5,604 5,901 6,036 8,140 2,105 25.9% 134 2.3%

Equipment Expense 1,795 1,850 2,018 2,001 (17) -0.9% 168 9.1%

Supplies & Stock 2,329 2,353 2,900 2,265 (635) -28.0% 547 23.2%

Outside Services 13,801 16,139 17,795 25,079 7,284 29.0% 1,656 10.3%

Utilities 5,276 6,976 6,555 6,665 110 1.6% (420) -6.0%

Travel & Other Employee Expenses 1,021 1,037 908 1,885 978 51.9% (129) -12.4%

Promotional Expenses 199 361 691 698 6 0.9% 330 91.4%

Other Expenses 8,368 5,430 7,831 6,547 (1,284) -19.6% 2,401 44.2%

Charges to Capital Projects/Overhead Alloc (10,066) (11,289) (11,579) (13,974) (2,395) 17.1% (289) 2.6%

TOTAL 82,008 89,623 97,209 105,333 8,124 7.7% 7,586 8.5%


2019 Year-to-Date

Portwide Financial Summary – YE Forecast

49

Expect strong financial performance results for 2019


2017 2018 2019 2019 Budget Variance Change from 2018

$ in 000's Actual Actual Forecast Budget $ % $ %

Aeronautical Revenues 264,114 291,268 367,953 365,604 2,349 0.6% 76,685 26.3%

Airport Non-Aero Revenues 236,803 257,707 264,756 259,537 5,219 2.0% 7,049 2.7%

Non-Airport Revenues 131,114 140,415 132,347 128,115 4,232 3.3% (8,068) -5.7%


Total Operating Expenses 372,982 397,638 456,188 454,986 (1,202) -0.3% 58,550 14.7%

NOI before Depreciation 259,049 291,752 308,868 298,269 10,599 3.6% 17,116 5.9%

Depreciation 165,021 164,362 168,676 168,676 - 0.0% 4,314 2.6%

NOI after Depreciation 94,028 127,390 140,192 129,593 10,599 8.2% 12,802 10.0%

Capital Spending by Division

50

Capital spending was $118.1M for Q1 2019

2019 YTD 2019 2019 $ in 000's Actual Forecast Budget $ %

Aviation 113,937 703,740 767,732 63,992 8.3%

Maritime 901 16,743 17,527 784 4.5%

Economic Development 834 5,682 5,713 31 0.5%

Central Services & Other (note 1) 2,454 23,072 25,203 2,131 8.5%

TOTAL 118,126 749,237 816,175 66,938 8.2%

Note:

(1) "Other" includes Street Vacation projects and Storm Water Utility Small Capital projects.

Budget Variance

Aviation DivisionAppendix

Airport Activity

2019 YTD total passenger growth of 3.7%

Q1 2019:

Passengers• YTD passenger growth of

3.7% tracking ahead of 2019 budget based on 3.0% growth, but just short of updated forecast based on 4% growth.

52

YTD 2017 YTD 2018 YTD 2019

% Change

from 2018

Total Passengers (000's)

Domestic 8,812 9,266 9,658 4.2%

International 1,181 1,210 1,207 -0.3%

Total 9,993 10,477 10,865 3.7%

Operations 93,398 98,102 100,740 2.7%

Landed Weight (In Millions of lbs.)

Cargo 468 530 565 6.7%

All other 5,748 6,097 6,300 3.3%

Total 6,216 6,627 6,865 3.6%

Cargo - Metric Tons

Domestic freight 50,381 52,223 55,946 7.1%

International freight 25,626 28,564 28,455 -0.4%

Mail 14,158 14,387 14,076 -2.2%

Total 90,165 95,174 98,477 3.5%

Passenger Activity

Change

Airline 2018 v. 2019

Alaska 4.8% 48.5%

Delta 10.3% 23.5%

United -13.0% 5.1%

Southwest -6.2% 5.4%

American -2.7% 5.7%

2019 Market

Share

Aviation Financial Summary

2019 Forecasted NOI $4.3M favorable to budget53

2017 2018 2019 2019


Operating Revenues:

Gross Aeronautical Revenues 267,690 291,268 367,953 365,604 2,350 0.6% 76,685 26.3%

SLOA III Incentive Straight Line Adj (1) (3,576) - - - - 0.0% - 0.0%

Aeronautical Revenues 264,114 291,268 367,953 365,604 2,350 0.6% 76,685 26.3%

Non-Aeronautical Revenues 236,803 257,707 264,756 259,537 5,219 2.0% 7,049 2.7%


Total Operating Expense 299,114 318,849 369,359 366,105 (3,254) -0.9% 50,510 15.8%

Net Operating Income 201,802 230,126 263,350 259,036 4,315 1.7% 33,225 14.4%

Capital Expenditures 293,785 579,135 703,740 767,732 63,992 8.3% 124,605 21.5%

(1) Annual non-cash amortization of $17.9M lease incentive related to the 5 year SLOA III agreement which ended in 2017.


Budget Variance Change from 2018

Key Performance Measures

2019 Forecast vs. 2019 Budget

Key Performance Metrics

CPE:• CPE – Impacted by SLOA IV

reduction in Revenue Sharing to 20% in 2019 from 40% in 2018

Non-Aero NOI:• Non-Aero NOI growth due to both

higher Non-Aero Revenue

Other Performance Metrics: • Aero Revenue Sharing – Forecast

reflects 20% Revenue Sharing per SLOA IV.

Positive: Non-aero NOI above budget. CPE below budget. 54


2017 2018 2019 2019 Budget Vairance Change from 2018

Actual Actual Forecast Budget $ % $ %

Key Performance Metrics

Cost per Enplanement (CPE) 10.52 10.79 13.22 13.39 0.17 1.2% 2.43 22.6%

Non-Aeronautical NOI (in 000's) 133,101 149,959 141,340 136,534 4,806 3.5% (8,619) -5.7%

Other Performance Metrics

O&M Cost per Enplanement 12.77 12.81 14.27 14.42 0.15 1.0% 1.46 11.4%

Non-Aero Revenue per Enplanement 10.11 10.35 10.23 10.22 0.01 0.1% (0.13) -1.2%

Debt per Enplanement (in $) 114 133 123 123 0 0.3% (10) -7.8%

Debt Service Coverage 1.57 1.66 1.59 1.65 -0.06 -3.5% (0.06) -3.8%

Days cash on hand (10 months = 304 days) 379 235 175 278 -103 -36.9% (60) -25.5%

Aeronautical Revenue Sharing ($ in 000's) (42,311) (36,863) (15,924) (15,682) (242) -1.5% 20,939 56.8%

Activity (in 000's)

Enplanements 23,416 24,894 25,890 25,394 496 2.0% 996 4.0%

Aviation Expense YTD Summary2019 YTD Actuals to YTD 2019 Budget

Expenses - $3.8M Favorable, driven by:

•Unplanned Expenses - $597k Unfavorable:• Primarily driven by snow related costs,

and in increase on Natural Gas index/spot rate – related to Enbridge pipeline rupture in October 2018

Offset by Cost Savings - $4.5M Favorable:• Outside Services – planning project and

program delays• Cost savings in allocations from other

divisions

Unplanned expenses absorbed by cost savings 55

2017 YTD 2018 YTD 2019 Year-to-Date


Operating Expenses:

Payroll 27,344 31,119 33,982 34,123 142 0.4% 2,863 9.2%

Outside Services 7,751 8,391 11,459 13,587 2,129 15.7% 3,068 36.6%

Utilities 3,599 4,909 4,632 4,359 (273) -6.3% (277) -5.7%

Other Airport Expenses 6,467 4,544 8,075 5,480 (2,595) -47.3% 3,532 77.7%

Total Airport Direct Charges 45,161 48,963 58,148 57,550 (597) -1.0% 9,185 18.8%

Environmental Remediation Liability 1,829 - - - - N/A - n/a

Capital to Expense - - 72 - (72) N/A 72 N/A

Total Exceptions 1,829 - 72 - (72) N/A 72 n/a

Total Airport Expenses 46,990 48,963 58,220 57,550 (670) -1.2% 9,257 18.9%

Police Costs 4,195 5,318 5,182 6,214 1,032 16.6% (136) -2.6%

Capital Development 2,480 2,694 2,361 4,146 1,785 43.0% (333) -12.4%

Other Central Services 12,130 13,128 13,013 14,463 1,450 10.0% (115) -0.9%

Maritime/Economic Development 966 971 920 1,129 210 18.6% (51) -5.3%

Total Charges from Other Divisions 19,772 22,112 21,476 25,953 4,476 17.2% (635) -2.9%

Total Operating Expense 66,762 71,074 79,696 83,503 3,807 4.6% 8,622 12.1%



Aviation Expense YE Summary2019 Forecast to 2019 Budget

Expenses - $3.3M Unfavorable driven primarily by:

• $2.6M estimated over-run in Snow Removal related expenses (affecting Payroll, Outside Services, and other Airport Expenses)

• $544k in Utilities expenses related to 2018 that were not accrued

Unplanned expenses drive negative budget variance56

2017 2018 2019 2019


Operating Expenses:

Payroll 114,463 125,341 141,063 141,316 253 0.2% 15,722 12.5%

Outside Services 41,055 47,638 63,229 60,950 (2,279) -3.7% 15,592 32.7%

Utilities 16,374 18,237 20,779 20,235 (544) -2.7% 2,541 13.9%

Other Airport Expenses 28,292 25,125 24,651 22,692 (1,959) -8.6% (473) -1.9%

Total Airport Direct Charges 200,184 216,341 249,722 245,192 (4,530) -1.8% 33,381 15.4%

Environmental Remediation Liability 8,812 6,233 14,259 14,259 - 0.0% 8,026 128.8%

Capital to Expense 2,856 6,891 - - - 0.0% (6,891) -100.0%

Total Exceptions 11,668 13,124 14,259 14,259 - 0.0% 1,135 8.7%

Total Airport Expenses 211,852 229,465 263,981 259,451 (4,530) -1.7% 34,517 15.0%

Police Costs 17,652 19,231 25,137 25,137 - 0.0% 5,906 30.7%

Capital Development 14,701 12,607 15,920 16,242 322 2.0% 3,313 26.3%

Other Central Services 51,004 53,121 59,175 60,129 954 1.6% 6,054 11.4%

Maritime/Economic Development 3,904 4,425 5,145 5,145 - 0.0% 720 16.3%

Total Charges from Other Divisions 87,262 89,384 105,378 106,654 1,276 1.2% 15,994 17.9%

Total Operating Expense 299,114 318,849 369,359 366,105 (3,254) -0.9% 50,510 15.8%



Aeronautical Business YTD2019 YTD Actuals to YTD 2019 Budget

• Aero Revenue 523K lower, and within 1% of Budget

• Aero Expenses – $1.6M favorable mostly driven by lower allocations from other divisions due to delays in project work

Aeronautical NOI slightly higher due to project delays57

Fav (UnFav)

2017 YTD 2018 YTD 2019 Year-to-Date Budget Variance


Revenues:

Movement Area 23,133 26,941 28,300 28,594 (295) -1.0% 1,359 5.0%

Apron Area 3,506 3,934 4,706 4,513 193 4.3% 772 19.6%

Terminal Rents 37,274 40,761 48,570 48,490 80 0.2% 7,809 19.2%

Federal Inspection Services (FIS) 3,079 3,071 3,267 3,408 (141) -4.1% 196 6.4%

Total Rate Base Revenues 66,992 74,706 84,843 85,005 (163) -0.2% 10,137 13.6%

Commercial Area 2,471 2,637 2,793 3,113 (320) -10.3% 156 5.9%

Subtotal before Revenue Sharing 69,463 77,343 87,635 88,118 (483) -0.5% 10,293 13.3%

Revenue Sharing (8,696) (7,208) (3,961) (3,921) (41) -1.0% 3,247 45.0%

Total Aeronautical Revenues 60,767 70,134 83,674 84,197 (523) -0.6% 13,540 19.3%

Total Aeronautical Expenses 42,822 47,132 48,884 50,460 1,576 3.1% 1,752 3.7%


Incr (Decr)

Change from 2018

Aeronautical Business YE2019 Forecast to Budget Revenue - $2.3M favorable• Rate based revenue $2.3 M higher–

driven primary by more costs to recover due to snow removal expenses incurred in Q1.

• Revenue sharing $242K - higher due to higher non-aero revenue forecast partially offset by reduction of revenue sharing percentage from 40% to 20%, based on SLOA IV provisions

Expenses – $2.8M unfavorable• Driven primarily by impact of snow

events in Q1

Higher Aeronautical Revenues primarily to increased cost to recover due to Q1 snow events

58

Fav (UnFav)

2017 2018 2019 2019 Budget Variance


Revenues:

Movement Area 108,638 116,703 130,149 130,873 (724) -0.6% 13,446 11.5%

Apron Area 16,771 15,627 12,823 19,714 (6,891) -35.0% (2,804) -17.9%

Terminal Rents 155,431 169,318 213,337 203,319 10,019 4.9% 44,019 26.0%

Federal Inspection Services (FIS) 18,612 16,226 14,709 14,521 188 1.3% (1,517) -9.4%

Total Rate Base Revenues 299,452 317,874 371,018 368,426 2,592 0.7% 53,144 16.7%

Commercial Area 10,574 10,257 12,859 12,859 - 0.0% 2,602 25.4%

Subtotal before Revenue Sharing 310,026 328,131 383,877 381,286 2,592 0.7% 55,746 17.0%

Revenue Sharing (42,311) (36,863) (15,924) (15,682) (242) -1.5% 20,939 56.8%

Other Prior Year Revenues (26) - - - - 0.0% -

Total Aeronautical Revenues 267,690 291,268 367,953 365,604 2,350 0.6% 76,685 26.3%

Total Aeronautical Expenses 195,414 211,101 245,943 243,102 (2,841) -1.2% 34,842 16.5%

Net Operating Income 72,276 80,167 122,010 122,502 (492) -0.4% 41,844 52.2%

Debt Service (1)

(86,564) (91,673) (111,673) (109,343) (2,330) -2.1% (20,000) -21.8%

Net Cash Flow (14,288) (11,506) 10,338 13,159 (2,821) 21.4% 21,844 189.8%

Incr (Decr)

Change from 2018

Aero Cost Drivers2019 Forecast to 2019 Budget• O&M – ($2.6) higher

primarily driven by impact of snow events in Q1

• Debt Service - $358K lower due to increase in Rate Base of NS NSAT Renov Phase 1 in-service ($2M), offset by 2015A bond principal paydown ($1.86M), project delay on Hardstand Equipment Purchase ($386K)

• Amortization - $408K increase due to Public Expense Projects -Flight Corridor Safety ($102K); IAF FAA Fiber Optic Cable Replacement ($169K) & Vanderlande Screening Lanes ($136K)

Aero rate base revenues based on cost recovery formulas59

2017 2018 2019 2019


O&M 192,188 206,076 239,950 237,387 2,563 1.1% 33,875 16.4%

Debt Service Gross 113,832 115,419 136,155 136,513 (358) -0.3% 20,736 18.0%

Debt Service PFC Offset (33,057) (32,987) (33,045) (33,045) - 0.0% (58) 0.2%

Amortization 29,654 32,371 30,529 30,121 408 1.4% (1,842) -5.7%

Space Vacancy (2,264) (2,132) (1,529) (1,521) (7) 0.5% 603 -28.3%

TSA Operating Grant and Other (901) (873) (1,042) (1,028) (14) 1.4% (169) 19.4%

Rate Base Revenues 299,452 317,874 371,018 368,426 2,592 0.7% 53,144 16.7%

Commercial area 10,574 10,257 12,859 12,859 - 0.0% 2,602 25.4%

Total Aero Revenues 310,026 328,131 383,877 381,286 2,592 0.7% 55,746 17.0%

Fav (UnFav)

Budget Variance

Incr (Decr)

Change from 2018

Aero Revenue Sharing

Lower revenue sharing percentage due to SLOA IV (20%) 60

2017 2018 2019 2019


Aero Revenues (incl' commercial) 310,026 328,131 383,877 381,286 2,592 0.7% 55,746 17.0%

Non-Aeronautical Revenues 236,803 257,707 264,756 259,537 5,219 2.0% 7,049 2.7%

Total O&M Expenses (299,114) (318,849) (369,359) (366,119) (3,240) 0.9% (50,510) 15.8%


ADF Interest Income 4,242 3,752 6,352 6,352 - 0.0% 2,600 69.3%

Security Checkpoint TSA Grant 1,039 1,001 1,028 1,028 - 0.0% 27 2.7%

Misc. Non-Operating Expenses (1,799) (1,586) (1,311) (1,311) - 0.0% 275 -17.4%

CFC Excess (2,750) (7,724) (4,309) (3,993) (316) 7.9% 3,415 -44.2%

Available for Debt Service [a]248,446 262,433 281,035 276,780 4,255 1.5% 18,602 7.1%

Debt Service 131,060 136,218 161,132 158,696 2,436 1.5% 24,913 18.3%

Debt Service x 1.25 [b]163,825 170,273 201,415 198,369 3,045 1.5% 31,142 18.3%

Available for revenue sharing [c]=[a]-[b]84,621 92,159 79,620 78,410 1,210 1.5% (12,539) -13.6%

Revenue Sharing [d]=[c]*0.5 (1)

42,310 36,864 15,924 15,682 242 1.5% (20,940) -56.8%

Fav (UnFav)

Budget Variance

Incr (Decr)

Change from 2018

Non-Aeronautical Business YTD2019 YTD Actuals to YTD Prior Year

Non-Aero Revenue -• Rental Car – relatively flat to PY,

primarily due to change in customer preference most noticeable in decline in 1-day rentals

• Parking – strong growth reflects higher enplanements driving increased demand

• GT – TNC revenue growth exceeds 36% YOY, partially offset by decline in demand for taxis.

• Clubs – demand driven growth Non-Aero Expenses – YOY growth reflects planned initiatives in the 2019 Budget

Revenue growth driven by Public Parking, GT, and Clubs and Lounges61

2017 YTD 2018 YTD 2019 Year-to-Date


Non-Aero Revenues

Rental Cars - Operations 6,129 6,009 6,234 6,271 (37) -0.6% 226 3.8%

Rental Cars - Operating CFC 291 1,293 994 1,144 (149) -13.0% (298) -23.1%

Public Parking 17,456 18,668 19,956 19,583 373 1.9% 1,288 6.9%

Ground Transportation 3,613 3,707 4,523 4,344 179 4.1% 816 22.0%

Airport Dining & Retail & Leased Space 13,346 13,887 14,336 14,409 (73) -0.5% 449 3.2%

Commercial Properties 7,810 2,894 3,212 3,081 131 4.3% 317 11.0%

Utilities 1,750 1,759 1,719 1,980 (261) -13.2% (39) -2.2%

Employee Parking 2,302 2,565 2,677 2,392 284 11.9% 111 4.3%

Clubs and Lounges 861 1,202 1,902 1,601 302 18.9% 700 58.2%

Other 449 387 442 449 (6) -1.4% 56 14.4%

Total Non-Aero Revenues 54,006 52,372 55,996 55,253 743 1.3% 3,625 6.9%

Total Non-Aero Expenses 23,940 23,943 30,813 33,043 2,230 6.7% 6,870 28.7%

Net Operating Income 30,066 28,429 25,184 22,210 2,973 13.4% (3,245) -11.4%

Fav (UnFav)

Budget Variance

Incr (Decr)

Change from 2018

Non-Aeronautical Business YE2019 Forecast to 2018 Actuals

Revenue –• Rental Car – fewer transactions offset

by higher average ticket price results in nearly flat Concession Revenue. Slight decline in Transaction Days and higher debt service in 2019 drive lower CFC Operating Revenue compared to PY.

• Parking – demand driven growth• GT – driven by TNC revenue growth,

partially offset by decline in demand for taxis

• Airport Dining & Retail – strong performance continues during lease transitions, and increased Concession revenue from AlClear memberships

• Clubs – demand driven growth• All other Non-Aero revenue showing

steady growth

Expenses -• Planned spending in line with 2019

Budget initiatives

NOI favorable to Budget, but lower compared to 201862

Public Parking Performance YTDKey message: Strong YOY growth in Parking revenue reflects higher enplanements and tariff increase for parking programs (Premier Corporate and Passport Parking) implemented mid-2018.

Strong YOY growth in reflects tariff increases and customer demand for close-in parking63

Public Parking - Revenue Detail Fav (UnFav) Incr (Decr)



Parking Garage Revenue to Port

Gross Sales - Parking Garage 18,877 20,109 21,262 21,217 45 0% 1,153 5.7%

less - WA Sales Tax (1,583) (1,686) (1,793) (1,774) (19) 1% (107) 6.4%

less - SeaTac Parking Tax (1,464) (1,564) (1,538) (1,706) 168 -10% 26 -1.7%

General Parking/Terminal Direct 15,829 16,859 17,931 16,288 1,643 10% 1,072 6.4%

Prebooking - - - 1,450 (1,450) -100% - N/A

Revenue to Port - General Parking 15,829 16,859 17,931 17,738 193 1% 1,072 6.4%

Other Garage Revenue

Premier Corporate Parking 218 289 348 292 56 19% 60 20.7%

Passport Parking Program 726 765 860 781 79 10% 95 12.4%

Total Parking Garage Revenue 16,774 17,913 19,140 18,811 329 2% 1,227 6.9%

Other Parking Revenue

Concession Rent - Doug Fox off-site parking 677 751 802 768 35 5% 51 6.9%

All Other Parking Revenue 5 5 14 5 9 193% 9 184.4%

Total Parking Revenue 17,456 18,668 19,956 19,583 373 1.9% 1,288 6.9%

Parking Transactions by duration Fav / (UnFav) Incr / (Decr)


in 000's Actual Actual Actual Budget # % # %

Total Enplanements 4,998 5,246 5,424 5,384 40 0.7% 179 3.4%

O&D % 70.3% 71.0% 71.0% 70.3% 0.7% 1.0% 0.0% 0.0%

O&D Enplanements 3,513 3,724 3,851 3,785 66 1.7% 127 3.4%

Revenue per O&D Enplanement Metrics

Public Parking 4.51$ 4.53$ 4.66$ 4.69$ (0.03)$ -0.6% 0.13$ 2.9%

Premier Corporate Parking 0.06$ 0.08$ 0.09$ 0.08$ 0.01$ 17.2% 0.01$ 16.7%

Passport Parking Program 0.21$ 0.21$ 0.22$ 0.21$ 0.02$ 8.3% 0.02$ 8.7%

Total Garage Revenue per O&D Enplanement 4.77$ 4.81$ 4.97$ 4.97$ 0.00$ 0.0% 0.16$ 3.3%

Public Parking Performance YEKey message: •Parking revenue growth primarily driven by enplanements.

2019 Forecast vs. 2018 Actuals• Revenue - Forecasted increase

compared to prior year, primarily due 4% higher enplanements for Public Parking and due to tariff rate increase in effect full year 2019 (rate increase effective July 2018) on Premier Corporate and Passport Parking.

Strong enplanements growth driving revenue increases.

64

Public Parking - Revenue Detail Fav / (UnFav) Incr / (Decr)



Parking Garage Revenue to Port

Gross Sales - Parking Garage 81,404 86,971 90,738 89,838 900 1.0% 3,767 4.3%

less - WA Sales Tax (6,818) (7,247) (7,537) (7,455) (82) 1.1% (290) 4.0%

less - SeaTac Parking Tax (6,563) (7,251) (7,829) (7,829) - 0.0% (578) 8.0%

General Parking/Terminal Direct 68,981 72,473 69,872 69,054 818 1.2% (2,601) -3.6%

Prebooking - - 5,500 5,500 - 0.0% 5,500 100%

Revenue to Port - Public Parking 68,024 72,473 75,372 74,554 818 1.1% 2,899 4.0%

Other Garage Revenue Programs

Premier Corporate Parking 958 1,225 1,321 1,247 74 5.9% 95 7.8%

Passport Parking Program 2,977 3,219 3,467 3,330 137 4.1% 248 7.7%

Revenue to Port - Parking Programs 3,934 4,444 4,788 4,578 210 4.6% 344 7.7%

Total Parking Garage Revenue 71,958 76,917 80,160 79,132 1,028 1.3% 3,242 4.2%

Other Parking Revenue

Concession Rent - Doug Fox off-site parking 3,109 3,238 3,262 3,200 62 1.9% 23 0.7%

Space Rent and Other Parking Revenue 25 56 60 19 41 216.5% 4 7.1%

Total Parking Revenue 75,093 80,212 83,481 82,350 1,131 1.4% 3,270 4.1%


O&D % 70.3% 71.0% 71.0% 70.3% 0 1.0% 0.0% 0.0%

O&D Enplanements 16,461 17,675 18,382 17,852 530 3.0% 707 4.0%

Revenue per O&D Enplanement Metrics

Public Parking 4.13$ 4.10$ 4.10$ 4.18$ (0.08)$ -1.8% -$ 0.0%

Premier Corporate Parking 0.06$ 0.07$ 0.07$ 0.07$ 0.00$ 2.8% 0.00$ 3.6%

Passport Parking Program 0.18$ 0.18$ 0.19$ 0.19$ 0.00$ 1.1% 0.01$ 3.6%

Total Garage Revenue per O&D Enplanement 4.37$ 4.35$ 4.36$ 4.43$ (0.07)$ -1.6% 0.01$ 0.2%

Rental Car Performance YTDKey message: Rental Car revenue continues to be impacted by availability of other transportation alternatives (TNCs, car-sharing, light rail, etc.).

•Most significant decline in rental car activity is in short-term (1-day) rentals.•Extended snow event adversely impacted February rental activity•CFC Operating Revenue is lower than prior year due to both the decline in Transaction Days and the increase in debt service.

Reduced transactions per O&D enplaned passenger65

Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr)




O&D % 70.3% 71.0% 71.0% 70.3% 0.7% 1.0% 0.0% 0.0%

O&D Enplanements 3,513 3,724 3,851 3,785 66 1.7% 127 3.4%

Gross Sales by Operators 51,216 51,451 46,451 53,246 (6,795) -12.8% (5,000) -9.7%

Total Transactions 287 285 247 289 (42) -14.5% (38) -13.3%

Average Ticket $178.35 $180.54 $188.00 $184.24 $3.75 2.0% $7.46 4.1%

Average Length of Stay 3.97 3.97 4.10 4.04 0.06 1.4% 0.13 0.03

Transactions/O&D Enplanements 8.17% 7.65% 6.42% 7.64% -1.22% -16.0% -1.24% -16.2%

CFC Revenue Summary

Total Transaction Days 1,141 1,132 1,014 1,169 (155) -13.3% (119) -10.5%

CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0%

CFC Revenue Earned 6,849 6,793 6,082 7,014 (932) -13.3% (711) -10.5%

Other CFC Collections 17 0 783 - 783 N/A 783 2609156.7%

Total CFC Revenue 6,866 6,793 6,865 7,014 (149) -2.1% 72 1.1%

Debt Service Reserve Requirement (6,575) (5,501) (5,870) (5,870) - 0.0% (370) 6.7%

Residual - CFC Operating Revenue 291 1,293 994 1,144 (149) -13.0% (298) -23.1%

Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr)



RCF Concession Revenue to Port 5,209 5,069 5,271 5,324 (53) -1.0% 202 4.0%

Residual - CFC Operating Revenue: 291 1,293 994 1,144 (149) -13.0% (298) -23.1%

Land Rent/Space Rent/Other 1,212 2,233 1,958 2,091 (133) -6.3% (275) -12.3%

Total Rental Cars Operating Revenue 6,420 7,301 7,229 7,415 (186) -2.5% (73) -1.0%

Rental Car Performance YEKey message: Rental Car revenue continues to be impacted by availability of other transportation alternatives (light rail, TNCs, car-sharing, etc.)

2019 Forecast vs. 2018 Actuals

Rental Car Concession revenue - Forecast relatively flat to prior year. Concession Revenue is impacted by (3) key indicators:• Expected continuation of decline in Transactions

per O&D Enplanement reflects trend in passenger preference shifting to other transportation options, most notable in short-term (1-day) rentals

• Total Transactions are expected to contract YOY• Average ticket price is a function of rental car

pricing and customer demand, and can vary significantly. The 2019 Budget and the 2019 Forecast assumes an average ticket price higher than 2018 actuals due to the continued erosion of short-term rentals to other transportation modes. This metric will be monitored and adjusted in future forecast updates, as needed

• CFC Operating Revenue - Forecasted to decline YOY due to combined impact of decline in Transaction Days and increase in debt service compared to prior year.

Reduced transactions per O&D enplaned passenger66

Rental Car - Revenue Detail Fav / (UnFav) Incr / (Decr)

2016 2017 2018 2019 2019 Budget Variance Change from 2018

# and $ in 000's Actual Actual Actual Forecast Budget $ % $ %

RCF Concession Revenue to Port 33,465 31,352 33,474 33,586 32,666 919 2.8% 112 0.3%

Total Enplanements 23,416 23,416 24,894 25,890 25,394 496 2.0% 996 4.0%

O&D % 69.4% 70.3% 71.0% 71.0% 70.3% 0.7% 1.0% 0.0% 0.0%

O&D Enplanements 16,250 16,461 17,675 18,382 17,852 530 3.0% 707 4.0%

Gross Sales by Operators 310,987 52,065 334,355 335,857 326,665 9,192 2.8% 1,503 0.4%

Total Transactions 1,411 1,388 1,416 1,388 1,396 (8) -0.6% (28) -2.0%

Average Ticket $220.42 $37.52 236.08$ $242.00 $234.00 8.00 3.4% $5.92 2.5%

Average Length of Stay 4.34 4.37 4.44 4.50 4.43 0.07 1.6% 0.06 1.4%

Transactions/O&D Enplanements 8.68% 8.43% 8.01% 7.55% 7.82% -0.27% -3.5% -0.46% -5.8%

CFC Revenue Summary

Total Transaction Days 6,129 6,070 6,286 6,245 6,184 61 1.0% (41) -0.6%

CFC Rate per Transaction Day $6.00 $6.00 $6.00 $6.00 $6.00 $0.00 0.0% $0.00 0.0%

Total CFC Revenue Earned 36,837 36,261 37,716 37,472 37,106 366 1.0% (244) -0.6%

Reserve for debt service and CP interest: (21,715) (22,621) (21,802) (23,482) (23,482) - 0.0% (1,680) 7.7%

Reserve for CP principal payment: (3,000) (3,000) - - - - NA - NA

Debt Service Reserve Requirement (24,715) (25,621) (21,802) (23,482) (23,482) - 0.0% (1,680) 7.7%

Residual - CFC Operating Revenue: 12,122 10,641 16,263 13,990 13,624 366 2.7% (2,273) -14.0%

Rental Car - Revenue Summary Fav / (UnFav) Incr / (Decr)

2017 2017 2018 2019 2019 Budget Variance Change from 2018

# and $ in 000's Actual Actual Actual Forecast Budget $ % $ %

RCF Concession Revenue to Port 33,465 31,352 33,474 33,586 32,666 919 2.8% 112 0.3%

Residual - CFC Operating Revenue: 12,122 10,641 16,263 13,990 13,624 366 2.7% (2,273) -14.0%

Land Rent/Space Rent/Other 3,617 3,699 3,833 3,788 3,788 - 0.0% (45) -1.2%

Total Rental Cars Oper Revenue 49,203 45,691 53,569 51,364 50,079 1,285 2.6% (2,206) -4.1%

Ground Transportation YTDKey message: Significant changes in customer preferred ground transportation alternatives are reflected in both revenue and trip activity between GT operator categories.

•Growth in TNC activity continues to outpace the offsetting decline in all other GT operator categories combined, which results in an overall increase in trip activity of 11.2% YTD

TNC growth expected to continue to outpace enplanement growth67

Revenue to Port Fav (UnFav) Incr (Decr)



Ground Transportation Revenues

Transportation Network Companies 1,501 1,961 2,678 2,424 254 10.5% 716 36.5%

On Demand Taxis 1,228 987 859 960 (101) -10.6% (129) -13.0%

On Demand Limos 224 221 221 220 1 0.4% (0) -0.1%

Belled In Taxis (Annual Permit) 33 - 21 25 (4) -15.7% 21 N/A

Pre-Arranged Limos (Annual Permit) 136 - 127 130 (3) -2.4% 127 N/A

Courtesy Cars (cost recovery) 362 366 467 463 4 0.9% 101 27.6%

All other Operators (cost recovery) 78 44 88 68 20 28.9% 44 98.9%

Other Misc Revenues 51 126 62 53 9 16.3% (64) -50.8%

Total GT Revenue 3,613 3,707 4,523 4,344 179 4.1% 816 22.0%

Trip Activity Fav / (UnFav) Incr / (Decr)


in 000's Actual Actual Actual Budget # % # %

Ground Transportation Trips

Transportation Network Companies 261 357 450 446 4 0.9% 93 26.2%

On Demand Taxis 173 161 147 160 (13) -8.0% (14) -8.6%

On Demand Limos 17 16 16 16 (0) -2.9% (0) -1.7%

Belled In Taxis (Annual Permit) 20 4 4 6 (3) -39.4% (0) -0.5%

Pre-Arranged Limos (Annual Permit) 74 72 73 76 (3) -3.8% 1 1.0%

Courtesy Cars (cost recovery) 284 279 297 281 16 5.8% 18 6.4%

All other Operators (cost recovery) 18 13 16 13 3 26.6% 3 23.3%

Total GT Trip Activity 847 902 1,003 998 5 0.5% 101 11.2%

Ground Transportation YEKey message: Significant changes in customer preferred ground transportation alternatives are reflected in both revenue and trip activity between GT operator categories.


GT Revenue forecast compared to prior year:• TNC revenue forecast in 2019 reflects continued

shift in customer preference, and is expected to grow ~20% YOY

• Taxi revenue forecasted to decline -10% YOY• Minor differences between YOY revenue growth %

and YOY trip volume growth % are due to incidental billing adjustments.

GT Trip Activity forecast compared to prior year:• TNC trip volume expected to continue to grow

significantly faster than the growth in enplaned passengers. 2019 Forecast expects a 20% YOY increase in TNC trip volume.

• Taxi trips activity continues to continue to decline. 2019 Forecast expects a 10% YOY reduction in taxi trip volume

• Declines in other operator categories reflects the changing GT operating environment

TNC growth expected to continue to outpace enplanement growth68

Revenue to Port Fav / (UnFav) Incr / (Decr)



Ground Transportation Revenues

Transportation Network Companies 6,940 10,349 12,348 11,574 774 6.7% 1,999 19.3%

On Demand Taxis 5,199 4,475 3,906 4,176 (270) -6.5% (569) -12.7%

On Demand Limos 858 853 842 842 - 0.0% (11) -1.2%

Belled In Taxis (Annual Permit) 45 35 33 33 - 0.0% (2) -5.7%

Pre-Arranged Limos (Annual Permit) 626 635 588 588 - 0.0% (47) -7.4%

Courtesy Cars (cost recovery) 1,319 1,660 1,919 1,919 - 0.0% 259 15.6%

All other Operators (cost recovery) 394 340 388 388 - 0.0% 48 14.0%

Other Misc Revenues 303 424 214 214 - 0.0% (210) -49.6%

Total GT Revenue 15,684 18,772 20,238 19,734 504 2.6% 1,466 7.8%

Trip Activity Fav / (UnFav) Incr / (Decr)


in 000's Actual Actual Forecast Budget # % # %

Ground Transportation Trips

Transportation Network Companies 1,277 1,715 2,058 1,929 129 6.7% 343 20.0%

On Demand Taxis 750 723 651 696 (45) -6.5% (72) -10.0%

On Demand Limos 72 69 67 67 - 0.0% (2) -2.8%

Belled In Taxis (Annual Permit) 56 18 18 18 - 0.0% (1) -3.2%

Pre-Arranged Limos (Annual Permit) 337 347 344 344 - 0.0% (3) -1.0%

Courtesy Cars (cost recovery) 1,198 1,209 1,160 1,160 - 0.0% (49) -4.0%

All other Operators (cost recovery) 79 63 57 57 - 0.0% (6) -9.5%

Total GT Trip Activity 3,769 4,145 4,355 4,271 84 2.0% 210 5.1%

Airport Dining & Retail/Terminal Leased Space YTD

69

Food and Beverage rents have been restrained due to Central Terminal and NSAT concessions opening later than planned in budget


Revenue –• Food & Beverage – (5) new CT

quick service restaurants did not open in mid-January as planned. Temporary food units remained open, but pay lower percentage rents.

• Retail Sales– anticipated decline in “grab’n’go” food sales in response to new restaurant offerings is not as steep as anticipated in the budget

• Advertising – strong demand continues

• Space Rental – due to increased percentage rent from AlClear memberships

Airport Dining & Retail and Terminal

Leased Space 2017 2018

Org Basis (in 000's) Actual Actual Actual Budget $ % $ %

ADR Revenue

Food & Beverage 1

4,803 4,974 4,950 5,289 (339) -6.4% (24) -0.5%

Retail 1

2,994 3,396 3,260 3,194 66 2.1% (137) -4.0%

Duty Free 1

1,570 1,571 1,614 1,556 58 3.7% 44 2.8%

Personal Services 1

880 901 962 828 134 16.2% 61 6.8%

Advertising 1,666 1,467 1,591 1,653 (62) -3.7% 124 8.4%

Space Rental - Terminal 1,366 1,465 1,868 1,727 141 8.2% 403 27.5%

All other revenue 67 113 91 162 (72) -44.3% (23) -20.2%

Total ADR & Terminal Lease Revenue 13,346 13,887 14,336 14,409 (73) -0.5% 449 3.2%

Expenses

ADR & Terminal Leased Space 477 (7) 638 554 (84) -15.2% 645 -9077.6%

Income from Operations 12,869 13,895 13,699 13,855 (157) -1.1% (196) -1.4%

Fav / (Unfav) Budget

Variance

Incr / (Decr) from

20182019

Airport Dining & Retail & Terminal Leased Space YE

•2019 Forecast vs. 2018 Actuals

Revenue –

• Food & Beverage – expected to be in line with 2019 Budget, despite delay in some new lease opening dates

• Retail Sales – anticipated decline in “grab’n’go” food sales in response to new restaurant offerings is not expected to be as significant as anticipated in the budget

• Advertising – strong demand expected to continue

• Space Rental – increase primarily due to growth in AlClear memberships

Al Clear driving positive guidance due to strong sales and renewals from four state “Catchment” area

70

Airport Dining & Retail and Terminal

Leased Space 2017 2018 2019 2019

Org Basis (in 000's) Actual Actual Forecast Budget $ % $ %

ADR Revenue

Food & Beverage 1

21,579 23,132 23,780 23,780 - 0.0% 648 2.8%

Retail 1

13,989 17,005 15,989 15,445 545 3.5% (1,015) -6.0%

Duty Free 1

6,912 7,026 6,897 7,497 (600) -8.0% (129) -1.8%

Personal Services 1

3,728 3,951 4,125 3,785 340 9.0% 174 4.4%

Advertising 6,662 6,432 6,896 6,896 - 0.0% 464 7.2%

Space Rental - Terminal 5,656 6,415 7,046 6,026 1,020 16.9% 632 9.8%

All other revenue 454 363 880 965 (85) -8.8% 517 142.5%

Total ADR & Terminal Lease Revenue 58,980 64,323 65,613 64,393 1,220 1.9% 1,290 2.0%

Expenses

ADR & Terminal Leased Space 2,241 1,974 2,569 2,569 - 0.0% 595 30.2%

Income from Operations 56,739 62,350 63,045 61,824 1,220 2.0% 695 1.1%

Sales per Enplanement

SPE - Food & Beverage $7.18 $7.34 $7.12 $7.30 ($0.18) -2.4% ($0.22) -3.0%

SPE - Retail Sales $4.07 $4.37 $3.92 $3.88 $0.04 0.9% ($0.45) -10.3%

SPE - Duty Free $0.91 $0.83 $0.82 $0.90 ($0.08) -8.9% ($0.02) -1.9%

SPE - Personal Services $0.95 $0.94 $0.95 $0.89 $0.06 6.9% $0.00 0.4%

SPE - Airport Dining & Retail $13.12 $13.49 $12.81 $12.97 ($0.16) -1.2% ($0.68) -5.1%

Concession Revenue 1

per Enplanement $1.97 $2.05 $1.96 $1.99 ($0.03) -1.4% ($0.09) -4.5%

Fav / (Unfav) Budget

Variance

Incr / (Decr)

Change from 2018

Commercial Properties YTDKey messages:

• Strong in flight meal revenues due to higher enplanements and several Delta routes offering meal service as part of fare.

• Real estate portfolio now relatively stable, as most properties are now developed and occupied at full land rental rates.

Strong in flight meal revenues driving revenue positive NOI performance

71

Non-Aero Commercial Properties 2017 2018 2019 2019

Subclass Basis (in 000's) Actual Actual Actuals Budget $ % $ %

Revenue Source

NEW DEVELOPMENT PARCELS

DMCBP Land Rents - all (3) phases 168 372 372 372 - 0.0% 0

DMCBP In Lieu - 7yr repayment schedule (Phase I & III) 108 117 114 114 - 0.0% (3)

DMCBP In Lieu - lump sum payment (Phase II) 5,434 - - - - -

Subtotal DMCBP: 5,710 489 486 486 - 0.0% (3)

NERA 2 Land Rent - 47 89 89 - 0.0% 43

NERA 3 Land Rent - 127 162 162 - 0.0% 35

Des Moines Creek North Land Rent - - 21 21 - 0.0% 21 100%

Subtotal New Development revenue: 5,710 662 758 758 - 0.0% 96

In-Flight Kitchen Revenue 1,624 1,763 1,948 1,812 135 7.5% 185

Burien NERA 3 FAA Pilot Program grant 72 78 - - - (78)

All Other Commercial Properties Revenue 404 391 506 510 (4) -0.8% 116

Non-Aero Commercial Properties Revenue: 7,810 2,894 3,212 3,081 131 4.3% 319

Incr / (Decr) Fav /

Commercial Properties YE

Key message: Non-Aero Commercial Properties now entering into a phase of steady and predictable revenues.• Des Moines Creek North

construction nears completion and is expected to move into full land rental rate on schedule in May.

• Next expected development is Des Moines Creek West, not expected to begin construction until early 2022

2019 Forecast vs. 2019 BudgetRevenue – $0.7M increase • Revenues growth primarily due to

increased volume of In Flight Kitchen activity due to higher enplanements and more airline routes offering complimentary meals.

Commercial Properties now in a phase of steady and predictable revenues72

Non-Aero Commercial Properties

2017 2018 2019 2019

Subclass Basis (in 000's) Actual Actual Forecast Budget $ % $ %

Revenue Source

NEW DEVELOPMENT PARCELS

DMCBP Land Rents - all (3) phases 1,079 1,556 1,573 1,573 0 0.0% 17 1.1%

DMCBP In Lieu - 7yr repayment schedule (Phase I & III) 445 482 522 522 - 0.0% 40 8.2%

DMCBP In Lieu - lump sum payment (Phase II) 5,434 - - - - -

Subtotal DMCBP: 6,958 2,038 2,095 2,095 0 0.0% 57 2.8%

NERA 2 Land Rent 15 248 268 268 - 0.0% 20 8.3%

NERA 3 Land Rent 42 687 734 734 - 0.0% 47 6.8%

Des Moines Creek North Land Rent - 90 593 593 - 0.0% 503 560.2%

Subtotal New Development revenue: 7,015 3,063 3,690 3,690 0 0.0% 627 20.5%

In-Flight Kitchen Revenue 7,827 8,705 9,324 8,634 690 8.0% 620 7.1%

Burien NERA 3 FAA Pilot Program grant 1,402 1,807 - - - (1,807) -100.0%

All Other Commercial Properties Revenue 1,798 1,859 1,896 1,896 - 0.0% 36 2.0%

Non-Aero Commercial Properties Revenue: 18,042 15,433 14,910 14,219 691 4.9% (524) -3.4%

Incr / (Decr) from

2018 Actuals

Fav / (Unfav)

2019 Budget

2019 Capital Expenditures(1) The Design Builder construction in place has lagged behind

projections, primarily because of steel fabrication delays and overall manpower shortages.$8.7M of capital budget deemed to be public expense as the equipment will be transferred to TSA. 1 of 3 lanes have been installed; remaining lanes pushed out to Q4 2018 - Q2 2019.

(2) Changes in scope resulted in delay in advertising, notice to proceed, and construction phasing and spending plan.

(3) The decrease is indicative of the procurement delay we are experiencing for the project. The whole schedule had to be pushed back and actual construction may not begin until Q1 2020.

(4) Project delayed to address design deficiencies and additional scope. (5) A change in delivery method from one major works contract to two

contracts has resulted in deferred spending. (6) Project cancelled and resulted in a purchase of CNG buses.(7) Delays in getting TRA signed has deferred spending, anticipate

signature in mid-April.(8) Work was delayed due to electrical contracting capacity availability.(9) Storm damage in February increased the scope of this project and has

delayed the overall schedule. Weather could cause additional delays out into future years.

(10) Revised construction methodology resulted in more efficient efforts, deferring additional spending in to subsequent years.

(11) Project is expected to be slightly favorable to original budget.(12) Project is on track for budget.(13) Project is expected to be slightly favorable to original budget.

YTD spending variances primarily due to delayed spending73

$ in 000's 2019 2019 2019

Description YTD Actual Forecast Budget $ %

International Arrivals Facility (1) 69,546 339,546 376,548 37,003 9.8%

RCF Pavement Remediation (2) 58 1,058 5,200 4,142 79.7%

Condo Sound Insulation (3) 2 807 3,000 2,193 73.1%

Electric Utility SCADA (4) 3 708 2,800 2,092 74.7%

Fire Station - Westside (5) 151 2,351 4,000 1,649 41.2%

Employee Parking Bus Purchase (6) (206) (206) 1,268 1,474 116.3%

Cargo Buildings Improvements (7) 3 803 2,100 1,297 61.7%

ASL Conversions at Checkpoints (8) 200 2,350 3,400 1,050 30.9%

SD Pond Bird Deterrent Improvements (9) 98 8,658 9,620 962 10.0%

Service Tunnel Renewal/Replace (10) 2,159 14,159 15,000 841 5.6%

Checked Bag Recap/Optimization (11) 6,116 25,806 25,865 59 0.2%

Add'l Baggage Makeup Space IAF (12) 10,220 15,272 15,272 0 0.0%

NS NSAT Renov NSTS Lobbies (13) 37,235 140,964 141,054 90 0.1%

All Other 8,351 151,464 162,605 11,141 6.9%

Total Spending 133,937 703,740 767,732 63,992 8.3%

Budget Variance

SAMP Overview

YTD timing delay in Environmental Review and Advanced Planning

74

YTD Summary

2017 YTD 2018 YTD$ in 000's Actual Actual Actual Budget $ % $ %

SAMP Completion & Transition to Env Review 100 16 85 30 (55) -183.3% 69 431.3%

Adv Planning IDIQ - Master Plan 0 681 423 625 202 32.3% (258) -37.9%Environmental Review - Master Plan 47 0 24 397 372 93.9% 24 N/ASAMP Utilities Master Plan 0 0 145 100 (45) -45.0% 145 N/A

Total SAMP-Related Spending 147 697 677 1,152 474 41.2% (20) -2.8%

Fav (Unfav) Inc (Decr)

2019 Year-to-Date 2019 Budget Variance Change from 2018

Annual Forecast

2017 2018 2019 2019$ in 000's Actual Actual Forecast Budget $ % $ %

SAMP Completion & Transition to Env Review 1,335 462 300 300 0 0.0% (162) -35.1%

Adv Planning IDIQ - Master Plan 1,141 3,905 2,500 2,500 0 0.0% (1,405) -36.0%Environmental Review - Master Plan 169 521 1,600 1,600 0 0.0% 1,079 207.1%SAMP Utilities Master Plan 276 459 400 400 0 0.0% (59) -12.9%

Total SAMP-Related Spending 2,921 5,347 4,800 4,800 0 0.0% (547) -10.2%

Year-End Projection Fav (Unfav) Inc (Decr)

2019 Budget Variance Change from 2018

Maritime DivisionAppendix

Maritime 2019 Financial Summary

76

Significant Q1 expense savings



Ship Canal Fishing & Operations 754 786 1,014 1,005 9 1% 227 29%

Elliott Bay Fishing & Commercial Operations 1,411 1,438 1,277 1,479 (201) -14% (160) -11%

Recreational Boating 2,592 3,005 3,119 3,129 (10) 0% 114 4%

Cruise 71 32 43 78 (35) -45% 11 35%

Bulk 1,606 1,556 1,434 1,283 151 12% (122) -8%

Maritime Portfolio Management 2,610 2,845 2,550 2,523 27 1% (295) -10%

Other 8 8 5 0 5 NA (3) -40%

Total Revenue 9,053 9,670 9,442 9,497 (55) -1% (228) -2%

Expenses

Ship Canal Fishing & Operations 571 541 609 696 86 12% 68 13%

Elliott Bay Fishing & Commercial Operations 558 679 573 741 168 23% (106) -16%

Rec Boating 970 1,017 1,051 1,237 185 15% 34 3%

Cruise 114 547 506 915 408 45% (40) -7%

Security 0 0 0 (0) (0) 100% 0 NA

Other Maritime 101 143 162 136 (26) -19% 19 13%

Maintenance Expenses 1,947 2,535 2,229 3,149 920 29% (306) -12%

Portfolio Management 819 1,059 1,091 1,339 248 19% 31 3%

Other ED Expenses 174 168 125 174 49 28% (44) -26%

Total Maritime & EDD expenses 5,254 6,690 6,347 8,386 2,039 24% (344) -5%

Enviromental & Sustainability 224 150 421 634 213 34% 271 181%

CDD Expenses 181 218 160 211 51 24% (58) -27%

Police Expenses 876 1,088 881 1,106 225 20% (208) -19%

Other Central Services 2,269 2,312 2,426 2,688 262 10% 114 5%

Aviation Division 42 41 64 55 (9) -17% 24 58%

Total Central Services & Aviation 3,593 3,809 3,951 4,693 742 16% 142 4%

Envir Remed Liability 0 0 0 0 (0) NA 0 NA

Total Expense 8,847 10,499 10,298 13,079 2,781 21% (202) -2%

NOI Before Depreciation 207 (829) (856) (3,582) 2,726 76% (26) -3%

Depreciation 4,251 4,399 4,509 4,387 (122) -3% 110 2%

NOI After Depreciation (4,044) (5,229) (5,365) (7,969) 2,604 33% (136) -3%


2019 Year-to-Date

Maritime 2019 Business Line FinancialsPage 1

77

YTD YTD YTD YTD Total Year

$ in 000's Actual Actual Actual Budget $ % $ % Budget

2017 2018 2019 2019 2019

Cruise

Revenue 71 32 43 78 (35) -44.87% 11 34.38% 22,406

Expense 1,457 2,153 2,373 2,909 536 18.43% 220 10.22% 12,017

NOI Before Depreciation (1,386) (2,121) (2,330) (2,831) 501 17.70% (209) -9.85% 10,389

Depreciation Expense 1,313 1,608 1,660 1,495 (165) -11.04% 52 3.23% 5,986

NOI After Depreciation (2,699) (3,729) (3,990) (4,326) 336 7.77% (261) -7.00% 4,403

Rec Boating

Revenue 2,592 3,005 3,119 3,129 (10) -0.32% 114 3.79% 12,794

Expense 2,171 2,532 2,447 3,125 678 21.70% (85) -3.36% 11,750

NOI Before Depreciation 421 473 672 4 668 16700.00% 199 42.07% 1,044

Depreciation Expense 823 743 688 677 (11) -1.62% (55) -7.40% 2,727

NOI After Depreciation (402) (270) (16) (673) 657 97.62% 254 94.07% (1,683)

Maritime Portfolio

Revenue 2,610 2,845 2,550 2,523 27 1.07% (295) -10.37% 10,328

Expense 2,416 2,693 2,522 3,238 716 22.11% (171) -6.35% 11,982

NOI Before Depreciation 194 152 28 (715) 743 103.92% (124) -81.58% (1,654)

Depreciation Expense 668 680 637 619 (18) -2.91% (43) -6.32% 2,502

NOI After Depreciation (474) (528) (609) (1,334) 725 54.35% (81) -15.34% (4,156)

Ship Canal Fishing & Operations

Revenue 754 786 1,014 1,005 9 0.84% 227 28.91% 4,021

Expense 1,316 1,237 1,300 1,532 232 17.80% 63 5.13% 6,319

NOI Before Depreciation (561) (450) (287) (527) 240 83.78% 164 36.39% (2,298)

Depreciation Expense 415 377 546 590 45 8.18% 168 44.54% 2,370

NOI After Depreciation (976) (828) (832) (1,117) 285 34.21% (4) -0.51% (4,668)

Fav(UnFav) Bud Var Incr/(Decr) Chg fr Prior Year

Maritime 2019 Business Line FinancialsPage 2

78

YTD YTD YTD YTD Total Year

$ in 000's Actual Actual Actual Budget $ % $ % Budget

2017 2018 2019 2019 2019

Elliott Bay Fishing & Commercial Operations

Revenue 1,411 1,438 1,277 1,479 (201) -15.76% (160) -11.16% 5,927

Expense 1,246 1,448 1,243 1,653 410 32.96% (205) -14.15% 6,195

NOI Before Depreciation 165 (11) 34 (175) 209 NA 45 -421.11% (269)

Depreciation Expense 890 838 838 866 28 3.29% 0 0.01% 3,471

NOI After Depreciation (725) (849) (804) (1,040) 236 29.35% 44 -5.23% (3,739)

Bulk/Grain Terminal

Revenue 1,606 1,556 1,434 1,283 151 11.77% (122) -7.84% 4,254

Expense 288 406 362 438 76 17.35% (44) -10.84% 1,810

NOI Before Depreciation 1,318 1,150 1,072 845 227 26.86% (78) -6.78% 2,444

Depreciation Expense 139 149 138 136 (2) -1.47% (11) -7.38% 543

NOI After Depreciation 1,179 1,001 934 709 225 31.73% (67) -6.69% 1,901

Other

Revenue 8 8 5 0 5 NA (3) -37.50% 0

Expense 56 30 50 184 134 72.83% 20 66.67% 748

NOI Before Depreciation (48) (22) (45) (184) 139 75.54% (23) -104.55% (748)

Depreciation Expense 2 3 3 3 0 0.00% 0 NA 14

NOI After Depreciation (50) (25) (48) (187) 139 74.33% (23) -92.00% (762)

Total Maritime

Revenue 9,053 9,670 9,442 9,497 (55) -0.58% (228) -2.36% 59,729

Expense 8,847 10,499 10,298 13,079 2,781 21.26% (201) -1.91% 50,822

NOI Before Depreciation 206 (829) (856) (3,582) 2,726 76.10% (27) -3.26% 8,907

Depreciation Expense 4,251 4,399 4,509 4,387 (122) -2.78% 110 2.50% 17,613

NOI After Depreciation (4,045) (5,228) (5,365) (7,969) 2,604 32.68% (137) -2.62% (8,706)

Fav(UnFav) Bud Var Incr/(Decr) Chg fr Prior Year

Maritime Capital 2018

79

Projects tracking to budget

Small Projects – Numerous projects within CIP are under feasibility discussions to either cancel or defer spending into 2020.

T117 Restoration – Schedule delayed due to delayed in Trustee negotiation.

New Cruise Terminal - A site for the new cruise terminal became available sooner than expected. Design development proceeding earlier than anticipated.

SBM Paving – Construction delayed due to re-evaluation of project scope after bids received 33% over Engineer's estimate.

$ in 000's $ %

Small Projects 486 3,167 3,954 787 20%

SBM Restrms/Service Bldgs Rep 12 2,873 2,920 47 2%

Contingency Renewal & Replace. 0 2,000 2,000 0 0%

MD Fleet 2019 0 1,911 1,818 (93) -5%

Cruise Terminal Tenant Improv 5 1,370 1,370 0 0%

T117 Restoration 46 546 1,040 494 48%

FT Docs 3,4,5 Fixed Pier 86 600 600 0 0%

New Cruise Terminal 27 1,077 600 (477) -80%

SBM Paving 10 724 596 (128) -21%

Maritime Technology Projects 14 450 450 0 0%

Marina Mgt Sys Replacement 8 426 426 0 0%

All Other Projects 207 1,599 1,753 154 9%

Total Maritime 901 16,743 17,527 784 4%

2019 YTD

Actual

2019

Forecast

2019

Budget

Budget Variance

Stormwater Utility

80

SWU tracking to budget




Revenue

NWSA 909 1,033 1,104 1,141 -37 -3% 71 7%

Tenants Revenue 158 185 262 265 -3 -1% 77 42%

Non-tenants Revenue 64 97 73 42 31 74% -24 -25%

Total Revenues 1,131 1,315 1,439 1,448 -9 -1% 124 9%

Expenses

SWU Direct 130 172 195 240 -45 -19% 23 13%

Maintenance Expenses 526 819 617 729 -112 -15% -202 -25%

EDD Expenses 5 2 9 12 -3 -25% 7 350%

Environmental & Sustainability 72 45 71 61 10 16% 26 58%

Capital Development Expenses 13 1 1 13 -12 -92% 0 NA

Other Central Service Expenses 19 35 46 37 9 24% 11 31%

Total Expenses 765 1,074 939 1,092 -153 -14% -135 -13%

NOI Before Depreciation 366 241 500 357 143 40% 259 107%

Depreciation 248 273 294 271 23 8% 21 8%

NOI After Depreciation 118 -32 206 86 120 140% 238 -744%

Economic Development DivisionAppendix

EDD 2019 YTD Financial Detail

82

Flat spending YTD over 2018



Revenue 2,019 2,167 2,155 2,112 43 2% (12) -1%

Conf & Event Centers 1,107 2,330 2,519 2,287 232 10% 189 8%

Total Revenue 3,126 4,497 4,674 4,399 275 6% 178 4%

Expenses

Portfolio Management 897 1,016 932 1,237 306 25% (84) -8%

Conf & Event Centers 1,653 2,033 2,276 2,206 (70) -3% 243 12%

P69 Facilities Expenses 50 53 51 57 6 10% (2) -4%

RE Dev & Planning 57 38 25 43 17 40% (13) -33%

EconDev Expenses Other 208 163 157 329 172 52% (6) -4%

Maintenance Expenses 666 850 716 1,022 305 30% (134) -16%

Maritime Expenses (Excl Maint) 9 34 46 98 53 54% 11 34%

Total EDD & Maritime Expenses 3,539 4,189 4,203 4,992 788 16% 15 0%

Small Business 12 20 47 57 10 17% 27 136%

Workforce Development 95 86 193 407 214 53% 107 125%

Tourism 232 239 194 369 176 48% (45) -19%

EDD Grants 12 6 (54) 50 104 208% (60) -1019%

Total EDD Initiatives 351 351 380 884 504 57% 29 8%

Environmental & Sustainability 53 46 81 91 10 11% 35 76%

CDD Expenses 91 57 63 60 (2) -4% 6 10%

Police Expenses 39 41 45 56 12 21% 4 10%

Other Central Services 1,239 1,266 1,202 1,339 137 10% (64) -5%

Aviation Division 33 35 27 41 14 35% (8) -24%

Total Central Services & Aviation 1,455 1,445 1,418 1,588 171 11% (27) -2%

Envir Remed Liability 0 0 0 0 0 NA 0 NA

Total Expense 5,345 5,984 6,001 7,464 1,463 20% 17 0%

NOI Before Depreciation (2,219) (1,487) (1,326) (3,065) 1,738 57% 161 11%

Depreciation 927 998 931 949 19 2% (67) -7%

NOI After Depreciation (3,146) (2,485) (2,257) (4,014) 1,757 44% 228 9%


2019 Year-to-Date

EDD Capital 2018

83

Prioritization and project delays

Tenant Improvements - Capital – Leases forecasted to expire will be renewed and require additional capital investment.

Small Projects – Upland Garage EV Charging Station project was cancelled by project sponsor for 2019. Project feasibility for 2020 under discussion

P66 HVAC – The remainder of the control system upgrade (Phase 2) was accelerated to be complete by end of 2019

$ in 000's$ %

Tenant Improvements -Capital 0 1,152 1,012 (140) -14%

RE: Contingency Renew.&Replace 0 1,000 1,000 0 0%

Small Projects 3 810 1,000 190 19%

BHICC Interior Modernization 446 750 750 0 0%

P66 HVAC Systems Upgrade 85 849 690 (159) -23%

T91 Upland PreDevelopment 21 471 625 154 25%

P69 Commission Chamber Refresh 106 282 301 19 6%

P69 Solar Panel System 171 300 300 0 0%

Fleet Replacement 0 30 30 0 0%

Other Projects 2 38 5 (33) -660%0 NA

Total Economic Development 834 5,682 5,713 31 1%

2019 YTD

Actual

2019

Forecast

2019

Budget

Budget Variance

Central ServicesAppendix

Central Services Financial Summary

85

Operating expenses were $5.4M favorable to budget in Q1 2019

Fav (UnFav)



Total Operating Revenues 33 29 182 10 172 1724.5% 154 533.4%

Core Central Support Services 16,896 17,947 17,948 19,904 1,956 9.8% 1 0.0%

Police 5,237 6,586 6,506 7,608 1,102 14.5% (79) -1.2%

Capital Development 3,041 4,260 2,924 4,757 1,834 38.5% (1,337) -31.4%

Environment & Sustainability 1,325 1,155 1,969 2,444 475 19.4% 813 70.4%

Total Operating Expenses 26,499 29,948 29,347 34,713 5,366 15.5% (601) -2.0%

Incr (Decr)

Central Services Expense by Category

86

Most of the budget savings came from payroll and outside services

• Payroll savings due to staff vacancies.

• Outside Services favorable budget variance mainly came from lower spending and project delays.

• Charge to Capital was lower than budget due to delay of some capital projects.



Salaries & Benefits 17,305 19,245 19,836 20,497 661 3.2% 591 3.1%

Wages & Benefits 4,982 5,988 6,256 6,994 739 10.6% 268 4.5%

Payroll to Capital Projects 4,792 4,689 4,999 6,713 1,714 25.5% 309 6.6%

Equipment Expense 295 670 459 618 159 25.7% (212) -31.6%

Supplies & Stock 189 248 201 297 96 32.3% (47) -18.8%

Outside Services 5,070 6,784 5,467 9,247 3,780 40.9% (1,317) -19.4%

Travel & Other Employee Exps 417 544 437 940 503 53.5% (107) -19.7%

Insurance Expense 582 540 575 575 () 0.0% 35 6.6%

Litigated Injuries & Damages 838 - - - - 0.0% - 0.0%

Other 593 678 885 853 (31) -3.7% 207 30.5%

Charge to Capital/Overhead Alloc (8,563) (9,438) (9,767) (12,021) (2,254) 18.7% 329 3.5%

Total 26,499 29,948 29,347 34,713 5,366 15.5% (601) -2.0%


2019 Year-to-Date

Central Service YE Financial Forecast

87

Expect a $1.7M favorable budget variance for 2019

Fav (UnFav)



Total Operating Revenues 68 (500) 185 185 - 0.0% 685 -137.0%

Core Central Support Services 71,071 73,576 81,577 82,710 1,133 1.4% 8,001 10.9%

Police 22,095 23,908 30,688 30,778 90 0.3% 6,780 28.4%

Capital Development 17,370 15,501 18,602 18,628 26 0.1% 3,101 20.0%

Environment & Sustainability 6,975 8,770 12,724 13,224 500 3.8% 3,954 45.1%

Total Operating Expenses 117,511 121,755 143,591 145,339 1,749 1.2% 21,835 17.9%

Incr (Decr)

Central Services Capital Spending

88

YTD spending variances primarily due to delayed spending

2019 YTD 2019 2019

$ in 000's Actual Forecast Budget $ %

Infrastructure - Small Cap 152 1,500 1,500 0 0.0%

Services Tech - Small Cap 71 1,000 1,000 0 0.0%

PeopleSoft Financials Upgrade 253 1,575 1,575 0 0.0%

Radio System Upgrade 1,422 9,140 9,140 0 0.0%

Police Records Mgmt System 0 300 800 500 62.5%

New Budget System 0 500 600 100 16.7%

Office Wi-Fi Refresh 0 500 500 0 0.0%

Maximo Upgrade 0 500 500 0 0.0%

STIA Network Redundancy 0 900 900 0 0.0%

Fiber Channel 0 350 600 250 41.7%

Phone System Upgrade 0 600 1,400 800 57.1%

CDD Fleet Replacement 125 1,434 1,439 5 0.3%

Corporate Fleet Replacement 115 1,328 1,328 0 0.0%

Other (note 1) 174 2,070 2,086 16 0.8%

TOTAL 2,312 21,697 23,368 1,671 7.2%

Note:

(1) "Other" includes remaining ICT projects and small capital projects/acquisitions.

Budget Variance

Documents

Port of Seattle Q1 2019 Financial Performance Report · Strong financial results in Q1 • Q1 YTD Actual: o Operating Revenues $2.6M favorable to budget and $16.9M over 2018. o The